The Podium

1. The courts
2. Congress
3. A new president
4. The budget
5. Deadlock

These are the five perils Julian Hattem of The Hillrecently highlighted as potential pitfalls for the FCC’s new net neutrality rules. Hattern’s full piece is required reading for anyone concerned about the future of the Internet, since it casts a light on sheer amount of uncertainty the rules are already causing.

An excerpt about the threat of deadlock from the piece, featuring our own Honorary Chairman Rick Boucher:

For now, given the FCC’s current makeup of three Democrats and two Republicans, any company asking for exemptions to the net neutrality rules is likely to be rejected.

But if that should happen to change — for instance, if a Democratic president is unable to move his or her nominees through a GOP-controlled Senate after the current commissioners’ term expire — the agency could be stuck in a 2-2 deadlock, which would automatically grant an exemption, known as forbearance.

“It’s not too far out there,” former Rep. Rick Boucher (D-Va.), who helped write the 1996 law undergirding the FCC’s authority, recently told The Hill.

“In that circumstance, if a forbearance petition is filed and they don’t act on it, it could be deemed granted.”

In the wake of the FCC’s controversial decision to regulate broadband services under Title II, our Honorary Chairman Rick Boucher spoke with Jim Puzzanghera at the Los Angeles Times about the possibility of Congress formally enshrining net neutrality into law. An excerpt:

Rick Boucher knows as well as anybody that net neutrality is the type of complex technology topic that Congress finds difficult to handle even when Democrats and Republicans are getting along.

But the former 14-term House member, a longtime player on Internet policy who now heads a telecommunications industry trade group, is optimistic that the controversial Internet issue could be a surprising source of compromise in a time of partisan gridlock.

“Each side can give the other the thing it wants the most,” Boucher, a well-respected Democrat who is honorary chairman of the Internet Innovation Alliance. “This is an optimal moment to legislate.”

At the Washington Post, Larry Downes has penned a piece highlighting a recent Georgetown Center for Business and Public Policy event commemorating the fifth anniversary of the National Broadband Plan. Headlined “Did the National Broadband Plan spur innovation?” the full piece is definitely worth checking out. An excerpt:

For the next five years, we need a significant policy reset to meet both the challenges and opportunities of the broadband revolution. Or rather, as I’ve argued before, a return to the bipartisan “light touch” policy embraced in the early years of the Internet revolution, in which regulators largely left broadband governance to the multi-stakeholder engineering-driven process that created the technology in the first place.

As the broadband revolution spreads its disruption farther from traditional computing, communications and consumer electronics industries, innovators need a kind of Hippocratic Oath from policymakers of all political persuasions. When considering regulatory intervention in quickly-evolving markets and technologies, our overriding public policy should be “first, do no harm.”

But given the alarming rise in heavy-handed interventions from state and local regulators, as well as a growing list of federal agencies including the FAA, FDA, FTC, SEC and the FCC itself, the prospects for a return to more rational policies — the kind that encouraged the broadband revolution to achieve the remarkable progress we have already witnessed — seem dim, at least for now.

The seeds for the National Broadband Plan were sown in the early days of the Obama administration. Perhaps the next president will call for a second plan that will build on the successes of the first. And learn from its misfires.

Today the Federal Communications Commission (FCC) released its net neutrality order. In response, IIA asks on Congress to step in with a non-partisan and long-lasting legislative solution that preserves and maintains the “open Internet” without the burdens of utility-style regulation. Our full statement:

Market uncertainty accelerates today with the release of the FCC’s decision to impose public utility regulation on the Internet. Long drawn out legal challenges to the agency’s embrace of Title II regulation without clear statutory authority now await the Internet ecosystem. Yet, Congress can still rescue the nation from this fate by crafting a non-partisan and long-lasting legislative solution that would preserve and maintain an ‘open Internet’ without the burdens of utility-style regulation. Now is the time for a bi-partisan Congressional effort aimed at creating statutory permanence that helps advance innovation, investment, and broadband deployment for the benefit of all Americans.

Earlier today, our Honorary Chairman Rick Boucher testified before the Subcommittee on Communications and Technology on the effects the FCC’s Net Neutrality proposal will have on the future of the Internet. In his testimony, Boucher — who served on the House Energy and Commerce and Judiciary Committees, along with the subcommittees on Communications, Technology and the Internet during his time in Congress — urged Congress to take up the issue via legislation. An excerpt:

If a Republican wins the 2016 presidential election, the new Administration would be unlikely to support a writ of certiorari to the U.S. Supreme Court if the rules are struck down by a U.S. Court of Appeals. It would be unlikely that in such an event the FCC in a Republican administration would initiate a new network neutrality proceeding. In fact it is probable that an FCC with a Republican majority would, as an early order of business, undertake a reversal of the reclassification order that will be approved tomorrow.

For these reasons, the network neutrality assurances of tomorrow’s reclassification order rest on a tenuous foundation. They are at risk of being lost. Legislation is, therefore, a superior solution. It would be virtually impenetrable from a judicial challenge, and would resolve this debate with a statutory permanence and degree of certainty not available through the regulatory process.

Says Congress should resolve the Open Internet debate with targeted legislation aimed at reinstating the 2010 Open Internet Rules and not imposing public utility regulation on broadband

WASHINGTON, D.C. – February 4, 2015 – In response to press reports highlighting the Federal Communication Commission’s (FCC) policy direction on new Open Internet rules, IIA issued the following statements from Rick Boucher, a former Democratic congressman who chaired the Energy and Commerce Subcommittee on Communications and the Internet and serves as honorary chairman of the Internet Innovation Alliance (IIA), and former Assistant Secretary of Commerce under Clinton – now IIA Founding Co-Chairman – Larry Irving:

From Congressman Boucher:

“I urge Chairman Wheeler to reconsider his plan to treat broadband services under common carrier rules. Subjecting broadband to public utility regulation under Title II is unnecessary for assuring continued Internet openness and would carry deeply harmful consequences. Internet infrastructure investment would be stifled at a time when we have a national goal of extending high-speed Internet service to 98 percent of Americans.

“A better way to preserve the open Internet, protect consumers and promote innovation is to encourage the private investment necessary to support the deployment of high-speed, next-generation broadband nationwide. I’m confident in Congress’ ability to secure a win for our nation with a bi-partisan legislative solution that empowers the FCC to re-promulgate the 2010 Open Internet Rule but precludes the imposition of onerous Title II regulations. This outcome would protect the Open Internet by remedying the D.C. Circuit’s objection that the Commission lacks the statutory authority to act and maintain the existing light-touch regulatory environment that is welcoming to high-speed broadband investment.”

From Larry Irving:

“Imposing Title II regulation on broadband Internet primarily will benefit lawyers. Endless litigation will create additional uncertainty in the market and impact Internet innovation and investment as companies and investors try to figure out what provisions do or do not apply in a new Title II world.

“Democrats primarily have driven the net neutrality debate, but today Republicans in Congress stand ready to work on a bipartisan basis on legislation aimed to ‘keep the Internet open.’ If an open Internet is the goal, why is the only acceptable mechanism for achieving that goal a centuries-old regulatory framework? Preserving the open Internet through bi-partisan legislation, achieving and declaring victory on an important issue, steering clear of interminable and disruptive litigation, and reducing consumer costs by veering away from antiquated Title II regulation would seem to be the better alternative.

“For more than two decades, from the earliest days of the Internet, I along with most Democrats involved in development of our nation’s Internet policy, have advocated a light regulatory touch for the Internet. I still believe that to be preferable to utility-style regulation for the fast-moving and constantly evolving Internet. But, as important, to craft the right solution for America, we need to end the partisan politics around the Open Internet issue and work towards and embrace bi-partisan solutions.”

Yesterday, the Washington Post published a must-read piece from Larry Downes breaking down why everyone who supports an open Internet should support the net neutrality bill making its way through Congress. An excerpt:

The proposed law is short and sweet. It grants the FCC authority to enforce tough new limits on how ISPs manage network traffic, directly addressing the kinds of practices both the agency and the White House have argued could, if implemented by ISPs in the future, threaten the continued success of the U.S. Internet.

At the same time, it would cleanly resolve the long-running conflict between the agency and the federal courts, who have rejected two earlier net neutrality efforts from the FCC on the ground that Congress never delegated oversight of broadband ISPs to the agency.

You can — and should — head on over to the Washington Post to read Downes’ full piece, but if you’re in a hurry we’ve put together an infographic highlighting the eight reasons he gives for supporting the bill.

Our Honorary Chairman Rick Boucher has taken to the pages of Roll Call to argue that Congress should act now to ensure net neutrality. An excerpt:

The coming month, before the FCC acts presents a timely opportunity for Congress to step in and resolve the debate on terms that would seemingly be agreeable to Democrats and Republicans, broadband providers and consumers seeking continued access to robust high-speed Internet services. The FCC promulgated its open Internet rule in 2010 against a backdrop of consensus that had been reached through lengthy discussions among the stakeholders. While not all of the parties were in agreement, a critical mass of consumer groups, broadband providers and policymakers created the consensus that resulted in the FCC’s open Internet framework. It’s notable that among broadband providers, AT&T publicly expressed support for the rule, and it was ultimately approved with the FCC’s Democratic members voting affirmatively. Even more noteworthy is that in the four years since the open Internet rule was adopted, broadband providers have integrated its requirements into daily operations, and high-speed Internet access service has expanded absent consumer complaints of violations.

Now that 2015 is officially underway — and a new, Republican-controlled Congress is arriving in Washington — the FCC has announced its plan for net neutrality will be revealed in February. Via Brian Fung of the Washington Post:

The timing indicates Wheeler does not see the need for more public input on the benefits and drawbacks of using Title II, as earlier reports suggested. It also implies the FCC will not be able to avoid a showdown with Congress over net neutrality. Republican lawmakers are expected to introduce legislation this month to preempt any FCC rule on the subject.

Since Republicans have made clear they are opposed to regulating broadband providers under Title II, it’s looking increasingly doubtful that the issue will be put to rest anytime soon.

In a letter to Members of Congress and the FCC, 60 companies — including IBM, Cisco, Intel, and others — have warned that reclassifying broadband under Title II will reduce investment and threaten the very health of the thriving Internet ecosystem. An excerpt:

Reversing course now by shifting to Title II means that instead of billions of broadband investment driving other sectors of the economy forward, any reduction in this spending will stifle growth across the entire economy.

This is not idle speculation or fear mongering. And as some have already warned, Title II is going to lead to a slowdown, if not a hold, in broadband build out, because if you don’t know that you can recover on your investment, you won’t make it. One study estimates that capital investment by certain broadband providers could be between $28.1 and $45.4 billion lower than expected over the next five years if wireline broadband reclassification occurs. If even half of the ISPs decide to pull back investment to this degree, the impact on the tech equipment sector will be immediate and severe, and the impact would be even greater if wireless broadband is reclassified.

The investment shortfall would then flow downstream, landing first and squarely on technology companies like ours, and then working its way through the economy overall. Just a few years removed from the worst recession in memory, that’s a risk no policymaker should accept, let alone promote.

You can read the letter, submitted by the Telecommunications Industry Association, here.

At The Hill, Julian Hattem reports there is renewed interest in updating America’s Telecommunications Act:

The top Republican on the Senate Commerce Committee is pushing for Congress to overhaul the law governing the Internet, television and phone service.

Sen. John Thune (R-S.D.), the ranking member of the powerful panel, said on Wednesday that the Senate would likely begin work to update the law next year, and seemed to shine on the notion that Republicans would have taken control of the upper chamber.

“The world moves so fast that it’s hard for even the most technologically savvy and digitally-connected person to keep up with everything, so it should be no surprise that our laws have fallen woefully behind,” he said at an event on Capitol Hill sponsored by the Free State Foundation, a free market-oriented think tank.

“We need 21st Century laws for a 21st Century world.”

One benefit of updating the 1996 Act would be a possible end to the never-ending — and exhausting — net neutrality debate once and for all. Here’s hoping Sen. Thune can rally the troops to make it happen.

At The Hill, Kate Tummarello reports that House Republicans want to take the net neutrality issue out of the FCC’s hands:

Republicans on a House panel want the country’s antitrust regulators, not its telecom regulators, to take the lead on net neutrality.

During a Friday hearing held by the House Judiciary Subcommittee on Antitrust Law, Republicans questioned the need for net neutrality regulation from the Federal Communications Commission (FCC).

“The Internet has flourished precisely because it is a deregulated market” and should be kept open through “vigorous application of the antitrust laws,” House Judiciary Chairman Bob Goodlatte (R-Va.) said.

The idea, according to Tummarello, is for the Federal Trade Commission to take the reigns:

“As regulatory proceedings continue to stretch on, a question I have is whether there might be a more efficient and more effective way to safeguard against potential discriminatory behavior than federal rulemaking,” Subcommittee Chairman Spencer Bachus (R-Ala.) said in his opening statement.

At The Hill, George S. Ford, chief economist of the Phoenix Center for Advanced Legal & Economic Public Policy Studies, warns that dysfunction in Congress could soon have a dramatic effect on Internet adoption:

[W]hen the Internet was in its nascency, Congress sought to encourage adoption by keeping prices affordable. To do so, Congress passed the ITFA, which imposed a three-year moratorium on the imposition of (new) state and local taxes on Internet access. Given that state and local governments aggressively and discriminatorily tax communications services, the moratorium aimed to reduce prices significantly and, consequently, encourage adoption. Since 1998, this moratorium has been extended three times, and is due to expire again in November 2014. While there is generally broad bipartisan support to extend — if not make permanent — the ITFA’s moratorium, given congressional gridlock, there are no guarantees.

With November 2014 rapidly approaching, the question policymakers now need to ask themselves is how a failure to extend the ITFA will affect these efforts to expand broadband adoption? Using both economic theory and empirical evidence, it is possible to make some predictions about the economic effects of failing to extend the ITFA. It isn’t pretty.

Ford predicts a potential loss of 30-60 million broadband connections if Congress fails to act on extending ITFA. Not pretty indeed.

Via Kate Tummarello at The Hill, lawmakers from both sides of the aisle have some ideas for how the FCC can successfully update an existing program to bring more technology to schools:

A bipartisan group of lawmakers laid out recommendations for the Federal Communications Commission to modernize its E-Rate program to fund technology in classrooms.

“The funding priorities must reflect the changing nature of the Internet, so that our classrooms and students have access to today’s technology,” a group of 46 lawmakers told the FCC in a letter on Monday.
“America’s school and libraries are in need of a technological update to accelerate next-generation education reforms, support teachers and enhance student learning through universal access to high-speed broadband.”

The latest flare up in the never-ending net neutrality debate involves the possibility that the FCC could regulate Internet service under Title II. At The Hill, Kate Tummarello reports the very idea of Title II has already inspired work on a bill from House Republicans:

A new House Republican bill would prevent the Federal Communications Commission (FCC) from going forward with a proposal for stronger regulations on Internet service providers.

Late Wednesday, Rep. Bob Latta (R-Ohio) — vice chairman of the House Commerce subcommittee on communications — introduced a bill that would keep the FCC from reclassifying Internet providers to treat them more like traditional phone companies, which are heavily regulated.

“The Internet has remained open and continues to be a powerful engine fueling private enterprise, economic growth and innovation absent government interference and obstruction,” Latta said in a statement announcing his bill.

As the FCC continues to design its upcoming incentive spectrum auction, 78 House Democrats have penned a letter — led by Congressmen John Barrow and Bennie G. Thompson — encouraging the Commission to maximize the benefits of the auction by ensuring they are open to all entities willing to bid. An excerpt from the letter:

For the auction to be a success, the Commission should maximize participation by both broadcasters incented to relinquish their spectrum rights and bidders seeking to buy those rights in the spectrum auction. In fact, inviting as many bidders as possible to compete in an open and fair auction on equal terms will allow for the full market price for spectrum to be realized and, in turn, lead to higher compensation to incent greater broadcaster participation resulting in more spectrum for the auction.

In order to meet these multiple needs simultaneously, it’s essential that the auction be open to all financially qualified bidders. Some have suggested that the largest mobile carriers be restricted in their ability to participate fully in the auction in order to favor smaller carriers. Limiting the ability of the largest carriers to purchase the spectrum their customers are demanding will mean fewer services for consumers and lower auction proceeds, rendering very difficult the challenge of meeting all of the competing and urgent demands for the auction revenues.

Moreover, it is not at all clear that spectrum acquisition restrictions on the largest carriers would actually promote competition.

Earlier today we held our latest Internet Academy, which featured former House Energy and Commerce Chairmen Rick Boucher and Jack Field discussing the past and future of America’s communications policies. We’ll have archive of the event up soon, but in the meantime, The Hill‘s Julian Hattern has a write-up. Check it out.

Congressman Adam Kinzinger and FCC Commissioner Ajit Pai have penned an op-ed for the Chicago Sun-Times on the need to better train kids for the digital economy. The full op-ed is definitely worth checking out, but here’s an excerpt:

To prepare our children for digital-age jobs, we need to get them online today. Our students’ futures are too important to let this opportunity for far-reaching reform slip from our grasp.

A student-centered E-Rate program would give kids in small towns a better chance to compete with those growing up in big cities. Real reform would help children in Illinois and throughout small-town America see a brighter tomorrow — and we stand ready to ensure that E-Rate lives up to that promise.

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